owns and develops Marriott and Hilton hotels properties; and Bobcats Sports and Entertainment (No. 41 on the BE INDUSTRIAL/SERVICE 100 list with $102 million in sales), owner of Charlotte, North Carolina’s NBA franchise and its arena operations.
The other enterprises, spread across a series of operating divisions that include a banking group, a financial services division, a restaurant unit, and an entertainment division, may appear on BE INDUSTRIAL/SERVICE and FINANCIAL SERVICES rankings in the future. Johnson’s role is one of a catalyst, for moving black enterprises “into the mainstream, where the companies owned by African Americans serve the broad population with no deference whatsoever to the minority ownership as a factor in the economics of the business.” In this exclusive interview, he spoke to BE’s Executive Editor Derek T. Dingle about what it will take to get there.
Define this stage of your business life. What’s your vision for the company?
I have always been a deal maker who believes that you can create a brand identity that helps you generate more deal opportunities. So when I left as the active owner and operator of BET, I had two choices: I could go fish, play golf, and just relax, or I could do what I like to do–generate value by putting together strategic deals with the right kind of people and bringing the right talent to operate the businesses. So when I call this my second act, it is simply doing in another business sector what I did in the cable industry. In cable, I found a strategic partner in [Tele-Communications Inc.] Chairman John Malone and at some point Time Warner. I have found strategic partners in just about every business I’ve got: I’ve got The Carlyle Group for my private equity fund; I’m partners with the hotel giants Marriott and Hilton; I’m partners with Deutsche Bank in our hedge fund; I’ve got Michael Jordan as my partner for my basketball team. What I do well is identify strategic partners who want to share the vision I have and want to participate in the opportunity created by that vision. So RLJ Companies is a brand defined as a well-capitalized, well-managed African American company that seeks strategic opportunities in certain business sectors.
It seems that you’ve solved some challenges to growth that most black entrepreneurs face, such as developing a sound infrastructure and, of course, raising capital.
To be fair, I made a lot of money with BET, so I had the advantage of having access to my own capital. But capital is still an issue. I think the bigger challenge for BE companies is, how do they define their companies? If they define their companies as family businesses to be passed down the line, then you run them to maintain control. And when you want to maintain control of a company, because it is sort of a family asset, you don’t run it for value creation. One, you can’t give up too much of it because you will lose control. Two, a family-run business